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Medical marjuana bill draws flak

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LUCRATIVE BUSINESS

State and local officials have no way to gauge how much money dispensaries are earning or what sales tax revenues they might end up collecting, because prices for an ounce of pot can vary from $200 to $600, and are not tracked.

But taking an average price of $450 an ounce and assuming someone consumes an ounce a month, with the estimated 100,000 card-carrying medical marijuana users in the state, that adds up to about $540 million in sales a year. Currently, Mesa County card holders account for about 3 percent of the state’s total, meaning there could be about 3,000 here.

Using these numbers, annual sales tax revenue to governments, assuming that all card holders are getting their medical marijuana at dispensaries and not growing it at home for themselves, would be:

• $15 million for the state (2.9 percent).

• $324,000 for Mesa County (2 percent).

• $445,500 for Grand Junction (2.75 percent). This assumes city sales tax applies to all 3,000 Mesa County card holders.

Ron Velarde’s drywall company went out of business last year because there was no work in town.

To make matters worse, he has leukemia.

Susanne Sheley’s husband, Randy, also was in the construction business. The couple have a small child to feed, but a 9.4 percent unemployment rate in Mesa County leaves them few jobs to earn the money to feed her.

The worst recession in decades has brought the highest unemployment rate in the state and forced Velarde and Sheley, like other people in the Grand Valley, to turn to medical marijuana over the past few months.

But not to smoke it, mind you. To sell it.

Velarde and the Sheleys opened two of the many medical marijuana dispensaries that cropped up around the valley in the past year: 18 in all, with another 16 caregivers holding Grand Junction sales tax permits.

Both managed to get their operations started before the city, like so many others in the state, placed a moratorium on more dispensaries.

And both are keenly interested in what the Colorado Legislature intends to do about regulating the ones that are operating.

“I didn’t want to go into this business,” said Velarde, who owns and operates Herbal Medical Center in Clifton. “Now that I’m here, I want to put more money into the business, but I don’t dare because I don’t know what’s going to happen.”

Like others in the dispensary business, or at least those who felt comfortable to talk to The Daily Sentinel about it, Velarde was referring to a bill that’s working its way through the Legislature. As written, House Bill 1284 would aim to shut down many dispensaries by limiting how many patients they can serve.

But because of intense pressure from the medical marijuana community, that may not happen. The lawmaker who introduced the bill plans to rewrite it to allow all existing dispensaries to remain open, and even grow.

“They’ll be rules promulgated by the Department of Revenue with regard to security, they’ll have to have secured areas with limited access, they’ll have to digitally record all transactions,” said Tom Massey, R-Poncha Springs. “If they want to play by our rules, theoretically there could be 34 dispensaries in Grand Junction. We’re not changing the status quo, but we’re setting up a very strict regulatory framework that they have to adhere to if they want to stay in business.”

Neither side pleased

Massey knows folks in law enforcement and those selling medical marijuana equally are unhappy with how his bill is shaping up. Dispensaries are afraid the cost of staying in business will be too high; law enforcement is angry they’ll be in business at all.

The bill, which has undergone hours of testimony in the House Judiciary Committee, isn’t expected to be altered or voted on by that 11-member panel until later this month. Massey said he has received “tons” of angry e-mails and telephone calls, including at least one death threat, from people on both sides.

Members of the panel are getting the calls and e-mails, too. Rep. Steve King, R-Grand Junction, is one of them.

King said he, too, is not pleased with where the proposed regulations are headed, and he fears there will be a number of unintended consequences. He’s been in the Legislature long enough to know that no bill, however well drafted, is able to consider every contingency. As a result, the state will end up with a flawed piece of legislation that will create new problems, but what they will be are unknown, he said.

“My constituents didn’t vote for a pot shop on every corner and a bud in every bowl,” King said. “My constituents are compassionate people and wanted those who are in pain to have options for relief. They didn’t vote for an industry to take over Colorado. My job is to attempt to create a functional system ... because this really is the wild West of pot law.”

Removing ambiguity

Initially, Massey’s measure would have limited dispensaries to serving no more than five patients. Under it, new nonprofit centers would be created as a way to consolidate the many smaller dispensaries that, like Grand Junction, dot most cities in the state like buds on a marijuana plant.

But now, Massey is backing away from much of that.

Under a rewrite he’s still working on, the measure would require the existing dispensaries, which henceforth would be called centers, to pay for an operating license from the state, not allow consumption on site, limit how much of the herb they could have and strictly control from where they could get it. Any dispensary that opts not to do that would be subject to the five-patient cap.

Oh, and the whole nonprofit thing? That’s out.

Many of the changes are intended to appease both sides, Massey said. For the existing dispensaries, the changes would allow them to remain, albeit highly regulated. For law enforcement authorities, they would know exactly who’s out there and from where their product is coming.

For both, Massey says the law would offer far more guidance to how the dispensaries would operate, and that with a separate measure he’s also sponsoring, which is designed to better define patient-doctor relationships, the legality of medical marijuana would become more certain.

“Police have this purist mentality that if it’s not absolutely their way, it obviously can’t be good ... and dispensaries wanted constitutional protection to be able to say they’re caregivers, but we’re not providing them that,” he said. “When I’ve got both sides upset with me, that means I must be on the right path.”

Law enforcement’s frustration

While those changes have made the measure a bit more palatable to law enforcement, some officials still feel it’s not nearly good enough.

Grand Junction Police Chief John Camper and Mesa County Sheriff Stan Hilkey aren’t at all pleased with the current state of affairs, but they don’t believe Massey’s bill is headed in the right direction, either.

Neither likes the idea of legalizing the herb because it’s still against federal law. Beyond that, the unregulated medical marijuana market has made for a law enforcement nightmare for their deputies and officers, and they welcome some clarity.

Last week’s news about a growing operation in a warehouse west of town was an example of their dilemma, they said. A grower can claim to be associated with an active dispensary, but law enforcement often has no easy way to verify that or know if the grower is producing more marijuana than necessary.

“This whole dispensary thing is a beast in its own that really has less to do with medical marijuana and more about attempting to legalize and legitimize marijuana dealing, and it’s extremely frustrating to me to see this going on.” Hilkey said. “I’d bet you at the end of the day this (warehouse case) is a person that is seeing a financial opportunity and using the state of confusion that’s existing to do something that you would normally go to prison for. I’m prepared to live with medical marijuana. This goes way beyond that.”

At the same time, Amendment 20, the constitutional measure approved by voters in 2000 that legalized medical marijuana, allows patients to have no more than 2 ounces of the herb at any one time. Neither that amendment nor Massey’s bill addresses how law enforcement is expected to track what users have. How then, Camper and Hilkey ask, are they or the dispensaries to know what someone has in their possession, and what’s to stop buyers from going from dispensary to dispensary to purchase way more than they need?

As a result of all those questions, police have to take extra care in how they treat the marijuana they do come across, Camper said.

“The problem in my mind is the inconsistency and indecision that really puts law enforcement in a difficult situation,” he said. “If people can’t figure out what the law is, how do they expect us to enforce it? Right now, we have to be concerned about liability. If we take plants and somebody decides down the line that we shouldn’t have done that, we’re liable. Well, that’s not how police departments should have to operate.”

Under Massey’s rewrite, the centers would be required to grow their own plants on site or at a single, separate location. Still, they would be limited to no more than six plants per patient, as the amendment allows. They also would be allowed to obtain up to 25 percent of their product from the smaller dispensaries.

Law enforcement not only is concerned about the dispensaries, but about the shear number of patients who are expected to have medical marijuana cards by the time the regulations go into effect.

How many dispensaries needed?

Currently, the Colorado Department of Public Health and Environment is charged with issuing medical marijuana cards. As of the end of February, it had about 43,000 people registered, but because of that large number it has only been able to issue cards to about 17,000 of them, department spokesman Mark Salley said. About 3 percent of them are in Mesa County.

At the current rate of about 1,000 new card applications a day, Massey predicts there could be up to 100,000 card holders by the time the Legislature adjourns in May.

That’s a lot of people purchasing a lot of herb, and that brings up additional concerns that local governments would have to deal with later, Grand Junction City Councilman Tom Kenyon said.

Kenyon recently traveled to Denver to meet with elected officials of other cities and towns in the state. The subject of medical marijuana obviously came up.

“Some people would say that the amendment didn’t allow for the commercial sale of this,” he said. “There’s other people who say we should reasonably accommodate people using it. But how many (dispensaries) does that take? I talked to people all over our state, and they’re really wanting to make sure that they’re not contributing to something that is illegal.”

Kenyon said once the Legislature is finished drafting new regulations, the city’s work will just begin. Massey’s proposed law is to include wide latitude to local government in how to zone the dispensaries, but what those ordinances would look like depends greatly on what the state comes up with, he said.

Not only will cities have to deal with issues of location, such as proximity to schools or areas where children congregate, but health concerns, particularly those dealing with food that has marijuana as an ingredient, he said.

Several local dispensary owners said they understood many of the concerns and even shared them, but they wanted local and state officials to remember one important point when they consider approving restrictions on the industry:

“Sure, we started this because we needed to pay a few bills, and it’s starting to do that,” said Susanne Sheley, who owns Elk Mountain Caregivers & Cultivators on 30 Road. “But there are really ill people who need this to manage their pain. That’s what this is all about.”